The asset finance market continues to grow rapidly – new business in asset finance grew by 39% in June 2021 compared with the same month in 2020. Meanwhile, 93% of asset finance providers expect new business growth over the next 12 months.
However, asset finance brokers also face new challenges as the market evolves, in order to remain competitive and keep ahead of regulators.
As interest and opportunity in alternative financing grows, so do competition, customer expectations and regulatory scrutiny. For brokers looking to stand out, it will become increasingly important to adopt a market-leading solution that adds value across the entire asset finance lifecycle and facilitates a frictionless customer journey on a single platform.
In this guide, we explore the UK’s changing asset finance and regulatory landscape, the challenges for growth and the tools and processes brokers can use to succeed.
The changing world of lending
Over the last decade, asset finance has established itself as a key source of funding and equipment. Customers come from a range of businesses, but particularly from fixed-asset intensive industries such as agriculture or construction equipment.
While alternative finance was originally conceived to increase choice alongside traditional lending, practitioners in alternative finance are subject to the same forces reshaping the traditional finance industry. These are bringing new changes to the market that asset finance brokers should be aware of.
New compliance demands
Having spent the last year focusing on mitigating the seismic impact of COVID-19 on markets, the FCA is taking a more proactive approach to regulation.
One of its key aims is ‘operational resilience ’ - pushing firms to implement a compliance-focused culture and sound governance arrangements to ensure that IT procedures and data management processes are up-to-date. In addition, regulators are demanding more transparency when it comes to commission disclosure, to ensure fair deals for customers and reduce the perceived risk of brokers and lenders adding unnecessary discretionary rates.
Both of these issues are particularly relevant in the era of remote working, with many firms now operating a hybrid working model of office and home. The move away from office working changes traditional forms of monitoring. Traditionally, there would have been physical management oversight and chats with teams in the office to see what they’re doing, along with standard practices on the setting up of office desktops. Now, processes are separated physically and personally, potentially leading to reduced visibility and transparency.
For firms operating with teams in multiple locations, workflows and processes should be updated to ensure not only efficiency between teams, but also to create secure processes that demonstrate fair treatment of customers .
In addition to adapting your compliance processes for new digital modes, it’s essential to modify your customerfacing experience to match what modern businesses expect from financing.
Customer expectations
After much of a year locked inside, many consumers have become more comfortable with a digital approach to finance, while many traditional firms that might look for asset financing have moved their businesses online.
These changes have fundamentally altered what consumers – now used to a one-stop solution such as Amazon – expect from a financial services experience. Even if the use of physical premises becomes the norm again, bringing a stack of paperwork into an office won’t cut it anymore. For brokers to capture the growing number of businesses looking for asset financing, and to provide the experience customers expect, they must present their service in a seamless, digital-first way.
Building a new asset finance journey
To remain compliant and competitive in the new financial marketplace, it’s essential for brokers to meet customer expectations. While change is partly driven by the altering needs of compliance, it can also be an opportunity for growth, improved efficiency and cost-effectiveness.
By using digital tools to provide the responsive experience that modern businesses expect, brokers can increase customer conversion, retention and profitability. Not only can automation help take care of repetitive manual work, but it can also manage the sales process, making brokers more compliant and data driven.
In order to reach this state, brokers need to plan strategically and add digital capabilities progressively. Key steps include:
1. Move data to a secure digital platform or close workflow gaps with additional systems to increase oversight and workflow efficiency.
2. Use your platform as the basis for a digital customer experience, to create a seamless journey.
3. Update your customer workflow to be more convenient, secure and efficient, by automating compliance processes.
When looking for a solution to digitise your processes and improve compliance, there are several key criteria to look for:
- Remote-ready: For teams working in multiple locations, customer information needs to be securely accessible by every team that needs it, at any time. The most convenient way to do this is to move to a cloud-based solution that securely stores data online rather than on-premises.
- Paperless: Working with physical documentation risks reducing the efficiency of your team, impacting your customer experience.
- Automation: For growing firms, manual work can slow workflows and limit customer acquisition. Your digital solution should work as part of your team, handling repetitive tasks such as document creation and standard communication.
- Secure: Storing customer information comes with an element of responsibility - look for a secure cloud system, with certifications such as ISO 27001, that can balance availability and security. Also, consider tools to improve security and reduce risk, such as automated ID verification and credit monitoring.
Securely digitise your data
Asset finance involves accessing a range of sensitive information including credit scores, banking details and personal data. The safest way to manage these is in an asset finance optimised customer relationship management (CRM) system.
CRM-enabled loan management platforms, such as Accelerate by QV Systems, bring all customer, prospects and deal information into one place. Accelerate enables your team to work more efficiently and effectively:
- Cloud-native: Accelerate is a cloud-first solution that can scale with your business, with new features added automatically.
- Customisable: Built on a single code base, Accelerate has been developed to adapt to your business, handling your end-to-end workflow or closing gaps between systems.
- Connected: Our API-first platform lets you instantly create secure connections between systems and trusted partners, to create a seamless experience for customers.
Once your data and structure are centralised, you can start adapting your journey to meet your customers’ expectations.
Streamline your customer journey
Providing an end-to-end digital service for customers requires three key elements: a digital front-end experience, a process to manage the lending journey online, and a system to track the customer journey.
Modern customers expect a seamless digital experience. This means a shift away from paper forms, reliance on physical premises and manual checks. Your online process should cover:
- Data capture: Registering enquiries, requesting compliance related information via online forms.
- Quote creation: Presenting information in a structured format that customers can review digitally.
- Deal management: Creating, editing, sharing and tailoring proposals with customers and intermediaries.
- Deal closing: Confirming proposals via electronic signatures for client convenience and faster closing of deals.
With every stage of your process managed online, you can design a more compliant customer workflow that suits your business, providing security and transparency for your team and your customers.
Automate your compliance processes
Manually managing compliance can be slow and inefficient for firms, taking time away from customer care and risking penalties in the event of human error. However, since compliance and due diligence regulations largely rest on the consistent application of rules and processes, they’re an ideal target for carefully implemented and audited automation.
Once your customer and deal data is stored and managed within a central system, you can set rules and actions for key stages of the sales process to remain compliant.
QV Systems is leading the way in compliance-enhancing features such as:
- Document management: Automatically generate and send customers preformatted documents so that they receive all the necessary information before, during and after point of sale.
- Configurable workflow management: Amend your sales process to accommodate changing requirements, suit your business needs and ensure that the customer is getting the best possible service.
- Fraud prevention: Reduce fraud risk and ensure you’re interacting with the right customer with Electronic ID and Verification and comprehensive checks.
- Payment management: Collect payments, manage admin fees and hold deposits, by taking payments securely online without having to record sensitive data.
Your complete asset finance toolkit
Updating your systems to stay compliant and competitive doesn’t have to be a headache. By choosing the right transformation partner to support your firm, you can evolve into a more efficient, profitable and reliable service provider.
Accelerate is a cloud-based leasing and lending platform, used by forward thinking asset finance businesses to future-proof their services and offerings. Built on a single codebase, it’s a complete, flexible asset finance solution that you can customise to your needs, and those of your customers.
With built in CRM, automation and analytics, Accelerate gives you the tools to become more compliant, while improving your efficiency, profitability and customer service. You can choose the exact features you need and get the pricing to match, or get started straight away with Quickstart - our optimised broker solution with the essential tools you need for digitally optimised asset finance delivery.
To find out how Accelerate can help your business navigate changes with future-ready, cloud-based asset finance software, book a demo with our experts today.
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